Markets across Asia suffered another bruising day as investors scrambled for the exits, with Japanese stocks falling over 6% and into a bear market, and heavy losses in China and across Southeast Asia.

After another drop in the Nikkei, have the central banks stopped communicating with the markets? Economics editor David Wessel discusses.

The selloff has gripped global markets all week, fueled by uncertainty over the direction of the Federal Reserve's monetary policy and signs of cooling growth in emerging economies. The mounting worries are sending cash to traditional safe haven assets of Treasuries, the yen and Japanese government bonds while finance ministers and central banks across the region are taking steps to calm markets.

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U.S. stock futures turned higher and European stocks pared losses after better-than-expected showings on retail sales and jobless claims.

About 30 minutes ahead of the open, Dow Jones Industrial Average futures were up 11 points, or 0.1%, to 14989. Dow futures were down as much as 102 points earlier in the session, and lower by about 30 points just prior to the release of the data. Most major European indexes were down by less than 1% in the European afternoon.

"It is a sentiment driven fall that is feeding on itself," said Nader Naeimi, head of dynamic asset allocation AMP Capital Investors in Sydney, who helps the firm manage around $120 billion. "Investors seem to be taking profits wherever they can."

The most dramatic move was in Japan, with the Nikkei Stock Average falling 6.4% to 12445.38 and putting it 21.9% down from the intraday peak reached on May 23, the day Japan's 6-month rally turned south and begun three weeks of wild trading.

"All of a sudden, ka-boom, markets have deflated heavily," said Matthew Sherwood, head of investment market research at Perpetual in Sydney, which manages around $25 billion. Over the past five weeks investors have been disappointed both by the Fed suggesting it may pull back on its bond-buying program and over Japanese Prime Minister Shinzo Abe's long-term growth strategy, said Mr. Sherwood.

The fear that the Fed could change its monetary policy, along with signs that the U.S. economy is recovering, has encouraged investors to pull money out of emerging markets that are typically perceived as risky.

The resulting outflows have hit some of Asia's smaller markets the hardest—such as the Philippines and Thailand, which were down 6.8% and 2.1% respectively Thursday. Along with Japan, these markets were previously some of the region's best performers before the selloff started.

Some investors say the dramatic declines may be too much though, and this could just be a bout of volatility.

"Investors have spent several years allocating to emerging assets with liquidity from quantitative easing," said Kenneth Akintewe, a portfolio manager of local currency Asian bonds at Aberdeen Asset Management Asia Limited. "Now they are arguably overreacting to a possible reduction in policy stimulus, although the Fed's not going to take it away any time soon."

Moves so far by countries to stem the slide in markets and the exodus of cash have had mixed results. Indonesian stocks fell 1.9% even after the central bank raised its benchmark interest rate Thursday to boost the allure of the falling currency.

The increase came a month earlier than most economists were expecting, with Bank Indonesia saying it "is a pre-emptive response to rising inflation expectations and to safeguard macroeconomic and financial system stability amid global turmoil."

In India, the rupee has stabilized after the central bank Tuesday dived into the foreign-exchange markets to boost the local currency, though stocks have continued to fall.

"I don't think there's any reason to panic," Finance Minister P. Chidambaram said Thursday. "Steps are being taken to ensure that the rupee will find its level, and it's quite possible it will regain the losses it has suffered in the last few days."

Investors remain worried though because a weak rupee eats into their returns when they reconvert into dollars. The Bombay Stock Exchange Sensex fell 1%.

"The rupee weakness is likely to keep foreign investors away," said P.V.K. Mohan, head of equities at Principal Mutual Fund, a Mumbai firm which manages $344 million in stock funds.

In Thailand where the baht has fallen recently, the finance minister said it is at an "appropriate" level and that outflows were to blame. In Korea, the central bank said the yen's recent swings and the possible end to aggressive monetary easing in the U.S. are key downside risks for the country's growth.

The other dampener to sentiment came from China. Chinese stocks plunged after markets in the mainland reopened after a three-day public holiday, getting their first chance to react to signs the economy is slowing.

The Shanghai Composite Index hit a six-month low of 2126.22 in the session and finished down 2.8% at 2148.36. The Hang Seng China Enterprises Index, a measure of Chinese companies in Hong Kong, plunged 3.4%, its worst percentage fall since May 2012.

The dollar was last at ¥94.52 compared with ¥96.01 late Wednesday in New York. The dollar hit a two-month low against the dollar of ¥93.76 earlier in the session and has now lost around 9.2% of its value against the yen from the multiyear peak it reached on May 22.

—David Rogers in Sydney, Bradford Frischkorn in Tokyo, Michele Maatouk in London, Barbara Kollmeyer in Madrid, Natasha Brereton-Fukui in Singapore, and Gurdev Singh Virk in Mumbai contributed to this article.

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